2023 New Year’s Message from President and CEO Mitsugu Yamaguchi

January 5, 2023

Kobe Steel, Ltd.

To all members of the KOBELCO Group,

Happy New Year!
At the start of 2023, I would like to share my views with you.

Three years have passed since the global spread of COVID-19. While many countries and regions have chosen to live with it, the end of the pandemic is not yet in sight. I presume you are still experiencing various difficulties both in work and private life. I would like to express my deepest gratitude to all of you for your strenuous efforts in such circumstances.

This year marks the final year of the Medium-Term Management Plan that started in fiscal 2021. The business environment that surrounds us is becoming increasingly uncertain and unpredictable due to the Russia-Ukraine crisis, rising inflation driven by soaring energy and resource prices, accelerating global efforts to respond to climate change, intensifying conflicts and divisions around the world, etc. Although our Group has been affected by these factors to no small extent, we firmly remain committed to the two key issues in our Medium-Term Management Plan, namely establishing a stable earnings base and taking on the challenge of realizing carbon neutrality. As uncertainty and unpredictability increase, we are required to use our imagination and respond flexibly to the changing business environment. At the same time, we must always bear in mind our Group Corporate Philosophy, which serves as the cornerstone for making decisions, and the materiality we have set as our medium- to long-term priority issues. I hope these will continue to be the guiding principles for our actions in our work in the new year.

Next, I would like to share my perspectives for the new year and our renewed determination to work on the following initiatives.

The first is the thorough implementation of safety practices, which is the basis of manufacturing. A serious accident occurred at Takasago Works in March last year, which was followed by other accidents that took place one after another. In this message, I would like to ask you to reflect on your awareness and actions once again to ensure safety and adhere to the workplace rules. It is not easy to instill basic safety practices into every single person at the forefront of the workplace and turn these practices into daily operations. Based on this recognition, we will devote necessary management resources to safety activities and persistently and steadily promote the goals set forth in the Medium-Term Management Plan: (1) Developing human resources who put safety first and follow rules, (2) Creating a workplace culture where people can pay attention to each other, and (3) Ensuring essential safety in facilities without relying on human cognitive abilities. I believe all of these efforts will pave the way toward our ultimate goal of creating the safest and healthiest workplace in the world.

The second is establishing a stable earnings base. As I mentioned earlier, the future is uncertain due to soaring energy and resource prices. Even in this situation, we must continue to aim for a stable structure that is not easily affected by the business environment surrounding us, through exercising our creative ingenuity and strengths in sales, production and management.

The third is taking on the challenge of realizing carbon neutrality. The movement toward carbon neutrality is becoming a global trend, and many countries and companies are taking steps to protect the global environment. As exemplified by the launch of the low-CO2 steel product Kobenable Steel, our Group is also working on developing technologies to reduce its environmental impacts, primarily in its materials and machinery businesses. These efforts have spurred new businesses to gradually spring up in our Group. We will work together and continue to take every possible measure so that we can lead the way in mitigating environmental impacts in all of our materials, machinery, and electric power businesses.

In order to continue to make progress, we need your support and cooperation. Our Group is implementing a variety of measures, including the DX Strategy, Diversity & Inclusion, Next 100 Project, KOBELCO TQM, and QC Circle Activities. They are all designed to develop people, the greatest assets of our Group, and help them perform to their fullest potential. The wisdom and experience of every one of you is enormous, and when connected with two people, three people, and many more, it opens limitless possibilities. In today’s world, where connections between people are becoming weaker due to the pandemic, it is even more important than ever before to actively share your opinions and feelings with others so that you can collaborate and accomplish things that you are not able to do alone. We are advancing step by step toward the realization of a world where everyone can fulfill their hopes and dreams while enjoying safe, secure and prosperous lives. I hope we will make this year a year of leaping forward like a rabbit, which is the Chinese zodiac animal for 2023.

In closing, I would like to wish a wonderful year for all of you, including our Group employees and their families, and you can make a giant step forward in achieving what you aim for.

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